Why Valve Offering Secondhand Sales Will Be A Very Good Idea

Valve is loved by most gamers. Especially PC gamers. It’s not because they develop really great titles, but because they also act in the interest of the gamer. They are all for the gamer. However, despite this, it doesn’t mean that they don’t get into trouble.

The company has had their fair-share of lawsuits, however they’ve always found a way to settle. Notably, they got Activision-Blizzard to pipe-down regarding a name dispute of “DotA-Allstars”, and that’s quite a feat.

Unfortunately though, avoiding trouble with gamers and the industry is very difficult. The Federation of German Consumer Organization (FGCO) has decided to send the company a threat saying that they need to change their ways.

This is very typical of a “Rights Organisation”, they make a problem where no one really cares about what is happening. The FGCO has decided that they’ll take it upon all gamers to read the End-User License Agreement (EULA) for them, and then cause a scene about it. Let’s be honest, no-one ever reads those things and the only ones who do are Rights Organisations looking to litigate about something somewhat trivial.

The issue at hand, this time, is that the FGCO is a bit upset with Valve’s EULA. They state that the EULA is worded in such a way that if you decline it, in any way, you will lose access to Steam and to all your games as well. It’s a big issue, but no one ever declines it. Valve has the right to block admission to people who don’t want to agree to their terms, however the gamer has as much rights to access to content which they have purchased and may use. The issue of the EULA and “Decline” goes a bit further than I’m interested, at the moment. This paragraph is merely the basis of what the FGCO said.

However, alongside their threat to litigate, the FGCO said that they would also like Valve to update their system to include functionality, or to simply allow, players to resell goods acquired digitally. They are basing this claim on a recent ruling by the European Court of Justice.

Before we continue, please note that these two issues are very separate. The second part, for resell rights, is merely the FGCO saying “Oh, we want you to do this too.” It’s like flexing and saying, “We’re going to get you.”

For the purpose of this article, we’re going to focus on resell rights. Because the issue of EULA agreements and disagreements can be somewhat academic and should be left to the courts. Also, I don’t care too much, I’ll just accept what happens anyway. Really not fazed. I suspect that you aren’t either.

Your Rights

When you purchase a game, music CD, movie DVD, etc, you receive a right to use the product. You don’t own the content on the disc, but you own the disc itself. Essentially with tangible discs, you have two rights: one for use and a real right of ownership. Your real right of ownership allows you to do whatever you like with the object itself, but it limits what you can do with what’s “on” the object, namely, the code or movie itself.

That’s why if you deface or destroy your disc, there’s no repercussion. You won’t get into trouble and no one will care, because it’s yours. If you tamper with the source code, or copy the movie, you might land yourself into trouble and this is because you don’t own that but rather have a right to “use” it.

So, essentially, with tangible things you have two rights. This is why trading games and so on is so easy. You have the physical object which you can give away freely, however you are left with the issue of the data which you cannot manipulate. Luckily, though, people are allowed to transfer rights. With that, you’re allowed to transfer your right of use to someone else. Hence, secondhand game sales aren’t exactly “illegal” because you’re merely ceding a right of use to someone else. When you do so, you give up your very own right of use and will no longer own it or be allowed to use it. And if you have back-up copies, you will now need to destroy them because you no longer own the original.

A lot of agreements on the disc itself, however, try to limit people from transferring or ceding their right of use to another. This seems to be the leading issue with reselling games, and how publishers are trying to stop us from doing so.

But, remember the European Court issue above? Well, here’s a quick excerpt which puts all of this together, in a nice way.

Where the copyright holder makes available to his customer a copy – tangible or intangible – and at the same time concludes, in return form payment of a fee, a license agreement granting the customer the right to use that copy for an unlimited period, that rightholder sells the copy to the customer and thus exhausts his exclusive distribution right. Such a transaction involves a transfer of the right of ownership of the copy.

Following that quote, the court continued with “Therefore, even if the license agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy.” This means that the issue of publishers trying to limit your right to transfer rights is actually somewhat void. Them giving you unlimited use exhausts their distribution right, allowing you to distribute if you wish.

Please note that I’m using the above case as a piece of information to help everyone try to understand the basics. The court ruling is only preliminary and will be under a bit of scrutiny for the next few months, maybe even years. Nothing here is final, yet. It’s just an explanation of how the law works with regards to your rights.

Reselling On Steam

With all of the technicalities out of the way, let’s get to the idea I want to talk about. The FGCO wants Valve to allow people to resell their games on Steam, to anyone they like. According to the information above, people should be able to do this without issue. It’s within our rights to give use to someone else, as that’s all it is.

Unfortunately, with digital software no one has really implemented a platform to do this. Steam ties all games to your account, therefore if you buy a game and want to sell it you cannot do this easily. In a way you could sell the game, but you’ll then need to sell your entire Steam account and lose everything with it because you will no longer have access.

Steam can fix this though. They are in a very strong position to allow consumers to resell their games and make it work for everyone. If Steam implemented a system for this, it would not only offer publishers solid statistics on how many people are reselling their games on the second hand market, but it will also offer them a chance to make money from these sales. Publishers constantly cry about not being involved, this might be their chance.

The current Trade System on Steam only allows players to gift games that haven’t redeemed, played or installed. Once it’s linked to an account, it’s there to stay.

It doesn’t need to be like this, though. Valve can implement a system which allows players to sell their games on a secondhand market and still make it viable. Valve can overcome various issues such as payment, publishers moaning, and safety of transactions.

For example, if Valve implemented a system to do this they could charge a certain percentage fee to accommodate for using their system to trade games. That’s already extra money for them, and extra money for gamers who can now get rid of their games.

Gamers have never had the ability to sell used games through Steam, so if people don’t want to use the system, they don’t need to. If they do use it, and even if Valve and the publishers take a percentage, gamers are still getting money which would have never been received before.

Payment is always an issue, but how about only allowing secondhand sales to take place where the seller receives Steam Credit? Therefore, no money is sent to a bank account and then transferred out again to the seller. Instead, money is put into Steam and kept in the system. It’s still a win-win for the gamer, as they can buy new games with the proceeds of their sale. It’s essentially the same as selling a secondhand game and getting store-credit at that store. Or the same as returning an item and receiving store-credit only.

Valve will be offering the user their right to cede their rights. There’s no limitation on how payment needs to be made or dealt with, etc. This is therefore possible, on Valve’s very own terms. Furthermore, there’s no issue of cracked discs and so on, instead there’s a game moving from one account to another. There won’t be issues or complains because there’s nothing to complain about. A payment system is already available on Steam as well.

When trading online, payment is always an issue. With the amount of scams out there, it’s risky to do this, secondhand sales especially. If Valve acted as a middleman, which they would need to if they offered credit, they could allow a player to pay the exact amount the game is selling for, where once paid it goes into a “holding” account of some sort. Once the amount is verified, which Valve does on the fly for all purchases, the game would transfer to the new buyer and the seller would receive Steam Credit in the amount of the selling price minus any fees for Valve. This uses systems Valve already has in place, it also protects both consumers from fraud and it allows for a very wide arrangement of payment styles. Not to mention, Valve could make more money.

Take this one step further, and the relative publisher could be cut into the deal as well. Money for publishers on secondhand sales, that’s what they want, isn’t it?

The system will only work if it’s between players, Valve nor the publisher should buy the game. They will essentially lose out. It must be peer-to-peer. Following that, it won’t work if publishers and Valve ask for an outrageous fee to do this, and it won’t work if the price of games for PC now increase because of secondhand sales. If everything stays somewhat the same, and Valve and the publishers are reasonable, it can work for everyone.

Not to mention, with Valve as the middleman, a global sales network will be possible too. Basically, I can sell to anyone, anywhere, which is a lot easier than having to find someone to sell to locally.

Issuing Steam Credit is fine, because gamers will naturally buy new games and they’ll do so through Steam. Valve will then make money on that sale too. And imagine a lot of credit during a Steam sale?

This brings me to my next point, sales. Gamers can essentially buy games on sale and resell them for a higher amount and actually make a bit of money too. With the cuts that the companies involved could potentially get, it’s another win-win (+win).

Take this scenario, for example: A Borderlands 2 sale is on. I buy the game for really cheap, say a 50% discount. You, and two other friends, buy the game as well. You’re playing but really want a fourth player. You have a fourth friend who wants to play but cannot afford the game at full price, or doesn’t want to. Me, I cannot seem to play the game on my PC and I don’t have three others to play with. How about I sell the game to you with a 30% discount on the current retail price? I make 20% profit on my sale and you still get the game for cheaper. Sales are now better for everyone.

I’m happy, and you’re happy too. I’ve missed out on so many sales, only to find friends playing games I’m not willing to fork out full price for. Everyone would then make a bit of extra money and it might even make sales a bit more attractive because publishers will sell games for 50% less and still make, say, 5% back from the secondhand sale.

There’s a lot of possibilities here, and if done right, I believe that Steam offering secondhand sales is a good thing. Publishers will have access to true statistics on what is being sold and when, a chance to make extra money, where Valve can make a bit more money too, and the gamer can start to afford to play more games by selling old ones. And again, I believe Steam has the infrastructure to implement all of this.

This way offers ultimate control, for everyone. It gives Valve what they want, publishers what they want and gamers what they want.

Click Here, Read More. It's Easy.

If they implemented a system like that, it would be awesome. Win win for everyone. hmm, that might lose a few sales from people waiting to buy a product cheaper for second hand, but they’d make more on those second hand sales. Difficult to predict I guess… The second hand consumer will still have to download the game straight from valve so it’s not the game that is second hand, but the licence to use said game… quite a sticky situation… should be interesting for sure

http://egamer.co.za Dean Oberholzer

Yeah. There might be a few sales lost, but overall more people might buy it too. First time buyers of a series might pickup the second hand title and preorder the next release, which might not happen any other way around.

http://www.facebook.com/KingCarloIII Carlo Serafino

I think that is actually a really good idea! Steam does already have all the systems and services in place, as you said, to make this possible. Does sound like a fantastic proposal. Hopefully someone from Valve reads this =P